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Victims of tainted drug face long wait for relief

Complex process to pay victims of tainted steroids

Dee Morell, an X-ray technician from New Jersey, suffered a hip infection after receiving a tainted steroid injection.

Scott Lewis for the Boston Globe

Dee Morell, an X-ray technician from New Jersey, suffered a hip infection after receiving a tainted steroid injection.

Within weeks after Dee Morell received a tainted shot to treat arthritis in her left hip in September last year, she knew something was horribly wrong.

The 49-year-old X-ray technician started to feel worse, not better. Walking grew difficult, she needed constant painkillers, and for the past 10 months she has been too weak to work, making it a struggle to pay the mortgage.

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But a year after federal investigators traced a nationwide fungal meningitis outbreak to contaminated steroids made by a Massachusetts pharmacy, Morell and hundreds of others who received the drugs are still waiting to find out how much compensation they will collect and when they will receive the money.

“Everything about this is frustrating,” said Morell, who was diagnosed with a hip infection. “It would be of great help if the money was released immediately. I wouldn’t have to worry about losing my home.”

One of the biggest cases of drug contamination in recent American history has sparked a long and complicated legal case to win relief for victims. The Framingham pharmacy that made the drugs, New England Compounding Center, surrendered its license Oct. 3 last year and soon afterward filed for bankruptcy following a deluge of lawsuits, raising questions of when and how victims will ultimately be paid.

“It’s a not a simple process,” said Fredric L. Ellis, a Boston attorney representing several other victims who have sued the pharmacy. “It’s going to take time.”

It is going to take a lot of money, too. Already, at least 619 victims have sued or filed a legal claim against New England Compounding, and attorneys say thousands of victims could come forward with total damages amounting to hundreds of millions of dollars.

US Bankruptcy Court Judge Henry J. Boroff recently gave victims until Jan. 15 to file a claim and signed off on plans to advertise the deadline in more than 60 newspapers.

The US Centers for Disease Control and Prevention estimates that 750 people in 20 states have suffered fungal meningitis or other complications linked to the methylprednisolone acetate injections, including 64 people who died.

In addition, many of the 14,000 others who received tainted shots have also reported various other maladies, such as headaches and blurred vision, that do not fit within the CDC’s official definitions of the outbreak but could still register legal claims.

But New England Compounding reported it had just $1.3 million in cash when it filed for bankruptcy, prompting plaintiffs’ attorneys to widen their search for anyone else who might be liable, from the company that cleaned the pharmacy’s clean room to the pain clinics that administered the shots.

“Your theories of liability tend to stretch when the finances are tight,” said Seattle attorney William Marler, who has represented victims of several major food contamination cases in which the original manufacturer filed for bankruptcy.

It is a process that can take years, however. Marler and other attorneys launched a similar search for compensation after a 2011 listeria outbreak that killed 33 people was traced to tainted cantaloupes from Jensen Farms, prompting the Colorado farm to file for bankruptcy. Within a year, plaintiffs’ lawyers had collected $4 million from Jensen Farms’ estate and insurance policies to begin paying victims, but are still pursuing claims against retailers that sold the cantaloupes and other companies.

So far, government regulators have publicly blamed only one firm for the tainted steroid injections, New England Compounding, making it the most obvious target for lawsuits. Government investigators said they found black material floating in some drug vials and dirty equipment at the company’s lab in Framingham, indicating it was probably the source of the tainted drugs. They also uncovered evidence the pharmacy knew the clean room was contaminated and did not properly test the drugs before shipping them to clinics.

But with New England Compounding in bankruptcy, attorneys are also going after the pharmacy’s owners and other companies owned by the family that founded the firm, including a real estate firm and recycling business in the same office complex in Framingham, arguing the finances and operations were intertwined.

A judge agreed earlier in the year to freeze up to $21 million in profits and other payments that New England Compounding made to owners and other insiders in the year leading up to its bankruptcy, some of which could potentially be recovered to pay victims.

As much as $29 million more could potentially come from insurance policies purchased by New England Compounding and its pharmacists, according to two attorneys involved in the case. A spokesman for New England Compounding and the owners declined comment.

But that is just the beginning of the hunt for money.

Plaintiffs’ lawyers have already subpoenaed about 80 health care providers across the country who administered the injections and could potentially be liable, including Ocean
State Pain Management of Woonsocket, R.I., and Dr. O’Connell’s Pain Care Center of Somersworth, N.H.

In addition, attorneys have subpoenaed several of New England Compounding’s vendors that could potentially share some legal exposure. Some of those companies include Wilmington-based UniFirst, whose UniClean subsidiary cleaned the pharmacy’s clean room; Liberty Industries of East Berlin, Conn., which helped design the pharmacy’s clean room; and Analytical Research Laboratories of Oklahoma City, which tested some drugs New England Compounding distributed.

Plaintiffs’ attorneys hope to encourage these and other companies to contribute money to a fund for victims in exchange for a promise of immunity from further litigation, something they believe the courts are likely to approve as part of the bankruptcy process. At the same time, they are seeking the names of patients who received the injections, so they can be notified about their right to make a claim.

But many of the companies have resisted the subpoenas or argued they should not be blamed for the outbreak, raising questions of how much they will be willing to contribute to a victims fund.

UniFirst spokesman Adam Soreff said the company only cleaned portions of the pharmacy’s clean room once a month.

“UniClean was not responsible for NECC’s day-to-day operations, its overall facility cleanliness, or the integrity of the products it produced,” Soreff said. “Therefore, we believe any claims that may be brought against UniFirst or UniClean with respect to the NECC matter are without merit.”

Liberty Industries, meanwhile, objected to a subpoena it received, arguing that all the work it did to design some clean rooms for New England Compounding was completed years ago and was of “little relevance” to the recent contamination.

“Liberty had no further involvement with NECC and had no involvement with ongoing maintenance of the clean rooms,” said the company’s attorney, Nicole D. Dorman. “This case arises from a gross failure of maintenance” of the facilities.

But plaintiffs’ lawyers are hoping the threat of costly litigation that could drag on for years will prompt many companies to offer to settle, even if they do not feel they are liable.

Most of the lawsuits filed in state and federal courts around the country already have been consolidated in US District Court in Boston, where Judge F. Dennis Saylor IV has approved a voluntary mediation process for health care providers and other potential defendants to work out settlements with the injured.

Only about five companies agreed to enter mediation by the initial deadline last week, including the testing company and some health clinics, according to Kimberly Dougherty, an attorney at the Boston office of Janet, Jenner & Suggs, which is representing about 100 victims.

Doughtery said she is hopeful more potential defendants will opt to participate later. But Saint Thomas West Hospital of Nashville, which is facing at least 100 lawsuits, complained in court documents last week that victims’ attorneys were trying to “force them into its one-sided mediation program.”

Many attorneys expect a quicker resolution with people and companies directly tied to New England Compounding.

Thomas Sobol, lead counsel for the plaintiffs in the consolidated litigation, said he believes the trustee handling the New England Compounding bankruptcy will reach an agreement with the pharmacy’s principals and related entities this fall, paving the way to make initial payments to patients as early as next spring.

But Sobol, who is based in Boston, predicted it will be “nowhere near enough to compensate victims for their injuries” and said it will probably take much longer to resolve claims against all the other potential defendants.

Of course, as the case grinds on, some money that potentially could go toward victims is likely to be eaten up by professional fees in the bankruptcy case. Personal injury attorneys typically keep between one-third to 40 percent of money they collect for clients in pharmaceutical liability cases.

Paul D. Moore, the bankruptcy trustee in the case, said attorneys are earnestly working together to limit the fees to maximize the amount left for victims.

“I think it will be a meaningful amount of money” for patients, Moore said, “but given the deaths and the injuries, there is no amount adequate to compensate them for their losses.”

In fact, lawyers said it is difficult to estimate exactly how much victims are owed, based on their medical expenses, pain, lost income, and other factors. Marler, the Seattle attorney, said he has resolved death claims for anywhere from $100,000 to $10 million.

But one thing is certain: Many victims who survived the injections are still waiting for help.

Mary Jo Tolbert was hospitalized for three weeks, had to be put on dialysis when her kidneys stopped functioning, and did not fully recover from her tainted injection for months.

“I have never been so sick,” said Tolbert, 82, who lives in Edwardsburg, Mich., and sued New England Compounding last October. “For all I went through, I would like to be compensated.”

Kay Lazar of the Globe staff contributed to this report. Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.
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